Arkansas Employment and Unemployment – August 2018

By , September 21, 2018 1:28 PM

The employment report for August featured yet another drop in Arkansas’ unemployment rate – down from 3.7% to 3.6%.  That matches the historic low for the series last seen in May of 2017.  The lower rate was driven by substantial declines in the reported number of unemployed over the past two months:  The number of unemployed in August was down by over 1,400 following a decline of about 1,300 in July.  Over the most recent four months, the number unemployed has fallen by over 3,500.  Meanwhile, the household survey is also showing persistent declines in the number of employed:  Over the past 12 months there have been only two modest increases in employment, with a cumulative decline of 8,600.  As a result of these two trends, the labor force (employed plus unemployed) has also been moving lower over the past year.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Payroll Employment
The data on nonfarm payroll employment in Arkansas showed a slight decline August – down 900 jobs from July (seasonally adjusted).  The July total was also revised downward by 600 jobs compared to the report issued last month.  Monthly declines were distributed across many sectors, including some that have been showing notable growth in recent months.  Professional and Business services, which have increased by 6,100 jobs over the past year showed one-month a decline of 1,100 in August.  Both Construction and Manufacturing employment were also down for the month after having previously shown some welcome signs of growth.  One bright spot was Retail Trade, where 1,800 net new jobs were reported.  Over the past twelve months, total nonfarm payroll employment has expanded by 8,500 jobs — an increase of about 0.7%.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Two Measures of Employment
In our analysis of the June report, we noted that the household and payroll surveys were appearing to diverge.  The discrepancy continues to hold:  In the six months ending in August, the payroll report shows an increase of 0.6% while the household survey shows a 0.3% decline.  Of the two measures, the payroll survey is generally considered to be more accurate, although both will be subject to revision early next year.  Preliminary data from a third source of information on employment trends, the Quarterly Census of Employment and Wages,  tends to support the indication from the payroll survey: somewhat slow but positive employment growth.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

# # #

 *Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, can be found here:  Table-Seasonally Adjusted NFPE.

Metro Area GDP – 2017

By , September 18, 2018 2:02 PM

This morning, the Bureau of Economic Analysis released data on Gross Domestic Product (GDP) by Metropolitan Area for 2017.   Among metro areas covering parts of Arkansas, Northwest Arkansas (Fayetteville) saw the most rapid growth (up 3.4%) while Pine Bluff fared the worst (a decline of 1.7%).  Three of the eight exceeded the statewide growth rate of 1.1% but Fayetteville was the only metro area in the state to outpace the nation’s growth rate of 2.1% .

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The data for Metropolitan Areas generally show a great deal of variability from year to year, and are subject to substantial revision.  Today’s release included data revisions dating all the way back to 2001, but there were no revisions of any substance in Arkansas prior to 2010.  The table below shows how the revisions affected estimates of growth rates in 2016.  Fayetteville saw an upward revision from 3.9% to 5.6% and the growth rate for Hot Springs — which initially showed a contraction of 1.7% — was revised up to a positive growth rate of 0.5%.  Even more dramatically, the 2016 growth rate for Pine Bluff was revised from -1.4% to +3.2%.  Data for other metro areas showed relatively modest downward revisions.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The figure below shows the previously-published and revised GDP growth rates for 2010-2017.  In addition to showing the magnitude of revisions to recent data, the figure also displays the differences in growth patterns that have emerged among Arkansas’ metro areas over the course of the decade.  Fayetteville has shown positive growth every year, while the economic expansion in other metro areas has been interrupted by at least one year of contraction.  Declines have been particularly large and/or persistent in Fort Smith, Pine Bluff and Texarkana.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The cumulative effect of these growth patterns is that GDP in half of the state’s metro areas remains lower than the previous cyclical peak (2007).  As shown below, the cumulative 10-year growth rate for Fayetteville is a remarkable 38% — even after accounting for the sharp decline that took place over the 2008-09 recession.  The recession left Jonesboro essentially unscathed and steady growth since has resulted in a cumulative 10-year expansion of over 17%.  On the other hand, the 10-year growth rates in Fort Smith and Pine Bluff are -7.0% and -15.5%, respectively.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Per Capita GDP
A broad measure of a region’s productivity is its output per resident:  Real GDP per capita.  Measured in constant, inflation-adjusted 2009 dollars, GDP per capita in Arkansas was $36,714 — about 72% of the U.S. average of $51,337.  Fayetteville, Little Rock, and Memphis all had per capita GDP amounting to 90% or more of the national average, while the state’s other metro areas had considerably lower levels of output per person.  Hot Springs had the lowest GDP per capita — $28,274 or about 55% of the national average.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Real GDP per capita also provides an informative decomposition of GDP growth:  A region can be experiencing overall economic growth due to population growth or productivity growth or both. As shown in the table below, population growth was positive in all metro areas except Pine Bluff where an overwhelming share of the total decline in real GDP was associated with an outflow of people (although output per capita also declined).   In Fort Smith, GDP per capita declined, but an increase in population drove total output growth into positive territory.  In other metro areas, population growth and productivity growth went hand-in-hand in 2017.

Sources:  Bureau of Economic Analysis, Census Bureau

Sources: Bureau of Economic Analysis, Census Bureau

Metro Area Employment and Unemployment – July 2018

By , August 29, 2018 4:51 PM

Unemployment rates were generally lower in Arkansas’ metro areas in July.  Compared to July of 2017, rates were lower in all metro areas except for Memphis and Texarkana (not-seasonally adjusted data).  Today’s data release from the Bureau of Labor Statistics noted that rates were “lower in July than a year earlier in 323 of the 388 metropolitan areas, higher in 41 areas, and unchanged in 24 areas.”  Measured using seasonally adjusted data, unemployment rates were also down from the previous month in all metro areas except Memphis.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics, Metropolitan Area Estimates

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics, Seasonally Adjusted Metropolitan Area Estimates

The unemployment rate declines registered in July contribute to a downward shift in rates over the past three months.  From April to July, rates were down by magnitudes ranging from -0.2 percentage points in Jonesboro to -0.6 percentage points in Little Rock.  The exceptions were again Memphis and Texarkana, each of which has seen the unemployment rate creep upward by 0.4 percentage points since April.

Source: Bureau of Labor Statistics, Metropolitan Area Estimates

Source: Bureau of Labor Statistics, Seasonally Adjusted Metropolitan Area Estimates

Payroll Employment 
Nonfarm payroll employment showed mixed changes in July.  Little Rock, Memphis and Pine Bluff all saw monthly increases, while Fort Smith and Hot Springs experienced declines.  Payroll employment was essentially unchanged in Fayetteville, Jonesboro and Texarkana.  Compared to a year ago, employment is up an all metro areas except Hot Springs.  The areas with the strongest employment growth continue to be in the Northwest and Northeast corners of the state – Fayetteville and Jonesboro.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Arkansas Home Prices – 2018:Q2

By , August 24, 2018 4:28 PM

The latest home price data from the Federal Housing Finance Agency (FHFA) shows Arkansas home prices continuing to rise in most parts of the state, albeit at a somewhat slower pace than the national average.  According to the FHFA’s “Expanded Data Indexes*,” Arkansas house prices rose 0.9% in the first quarter and were 5.0% higher than a year earlier.  The U.S. average rose 1.3% for the quarter and was up 7.0% compared to 2017:Q2.

Source: Federal Housing Finance Agency

Source: Federal Housing Finance Agency

The downturn in house prices from 2007 til 2011 was far less severe in Arkansas than in other parts of the nation, and those markets that declined the most during the downturn have been experiencing the most rapid growth since.  From 2011:Q2 through 2018:Q2, Arkansas house prices increased 25.6% compared to the national average of 47.5%.

The pattern of larger declines in 2007-11 being associated with more rapid price growth since 2011 is apparent in the data for Arkansas’ metro regions.  Memphis and Northwest Arkansas suffered the largest declines during the crash and have both recovered sharply since then. On the other hand, Texarkana and Jonesboro experienced little if any price decline during the downturn, and have seen modest rates of price increase since then.   The experiences of other metro areas in the state lie between these two extremes.

Source: Federal Housing Finance Agency, Seasonal Adjustment by the Arkansas Economic Development Institute

Source: Federal Housing Finance Agency, Seasonal Adjustment by the Arkansas Economic Development Institute

Using the FHFA’s “All-Transaction Indexes*,” house price growth over the past 5 years has exceeded 25% in both Fayetteville and Memphis.  Gains in other areas have been less substantial.  Nevertheless, the price changes from before the crash until 2018 are positive across the state, ranging from +6.0% in Pine Bluff to +20.2% in Texarkana.

Source: Federal Housing Finance Agency, Seasonal Adjustment by the Arkansas Economic Development Institute

Source: Federal Housing Finance Agency, Seasonal Adjustment by the Arkansas Economic Development Institute

# # #

* The FHFA produces several house price indexes with different coverage.  The basic Purchase-Only Index includes prices from home sales that were financed through the federal enterprises Fannie Mae and Freddie Mac.  The All-Transactions Index also incorporates appraisals associated with refinancing.  Finally, the Expanded Index incorporates information from county recorders’ offices, capturing home sales that were not financed through the government housing enterprises.  More information is available at: https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx

Arkansas Home Sales – July 2018

By , August 23, 2018 4:58 PM

The Arkansas Realtors® Association reported today that July sales of new and existing homes totaled 3,480 – up 10.2% from July of 2017.  The summer months are typically the strongest months for home sales, although the pattern of month-to-month changes can vary depending on the timing of sales closings.  As was the case in 2016 and 2017, recorded home sales dropped off from June to July, but the decline was not as large in 2018 as last year.  If we combine the sales figures for May, June and July, summer sales in 2018 are 5.3% higher than the same period in 2017.  Year-to-date, the ARA report showed sales up 3.4% form 2017 to 2018.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Using statistical techniques to seasonally-adjust the data, the trend of recovery since late 2012 is evident. The seasonally-adjusted level of home sales in 2011 and 2012 was less than 2,000 per month, while the monthly sales rate in 2018 has averaged over 3,000 homes per month — an increase of 50% in only 6 years!

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Economic Development Institute

Source: Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Economic Development Institute

Much of the growth in recent years is attributable to a gradual recovery from the housing crash that preceded the 2008-09 recession. As shown in the quarterly, seasonally-adjusted figure below, the volume of home sales is now above the pre-crash peak and continues to rise.  With the recovery behind us and housing market conditions returning to a more stable environment, it would not be surprising to see the growth rate of home sales slow.  But while the 3.4% growth rate year-to-date represents a slowdown from the 8.1% average pace of 2013-17, it still represents a healthy rate of expansion.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Economic Development Institute

Source: Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Economic Development Institute

Arkansas Employment and Unemployment – July 2018

By , August 17, 2018 10:50 AM

The July report on state-level employment and unemployment reported some encouraging statistics on the Arkansas employment situation.  Thanks to a sizable decline in the number of unemployed (-2,096) the unemployment rate edged down from 3.8% to 3.7%.  Moreover, after nine consecutive months of decline, household employment rose in July (+452).

Source: Bureau of Labor Statistics, Local Unemployment Statistics (LAUS)

Source: Bureau of Labor Statistics, Local Unemployment Statistics (LAUS)

The national unemployment rate also ticked downward from 4.0% to 3.9% in July.  Arkansas’ unemployment rate is effectively the same as the U.S. rate, with the tiny difference statistically insignificant.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

 

Payroll Employment
The report on nonfarm payroll employment also contained some positive indicators for Arkansas, including the overall net increase of 2,600 jobs.  Professional and Business Services continued to be the strongest source of growth in July (+1,600) but Manufacturing showed a substantial gain as well (+1,200).  The increase in July Manufacturing employment was entirely attributable to Nondurable Goods, although the 4,000-job increase over the past 12 months included both Durable Goods (+1,300) and Nondurable goods (+2,700).  Other than Professional and Business services, growth in the service-providing sectors was rather weak.  Education and Health services was down for the month (-800) and year-over-year growth has slowed to near zero.  Construction employment increased in July (+200) and is contributor to year-over-year employment growth as well (+1,800).

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

From July 2017 through July 2018, the increase of 10,600 jobs corresponds to a growth rate of 0.9%.  Over the same period, job growth nationwide has been 1.6%.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

# # #

 *Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, can be found here:  Table-Seasonally Adjusted NFPE.

Arkansas Taxable Sales – 2018:Q2

By , August 13, 2018 8:55 AM

Arkansas Taxable Sales (ATS) rebounded in the second quarter of 2018, increasing by 1.8% after a 1.5% decline in the first quarter .  Compared to a year earlier, ATS was up 2.9%.  After adjusting for inflation, the year-over-year increase amounts to a real gain of only 0.8%.

Including gasoline purchases, Arkansas Taxable Sales Including Gasoline (ATSIG) expanded by 2.0% in the second quarter and was up 4.0% from a year earlier.  The relative strength in gasoline sales has been driven by higher prices:  The average gasoline price in Arkansas in the second quarter was $2.57, up from $2.33 in the first quarter and $2.11 in the second quarter of 2017.  Accordingly, spending on gasoline increased by 5.6% in the second quarter and was up 23.2% from a year earlier.  From 2017:Q2 through 2018:Q2 gasoline sales increased from 5.0% to 5.9% of total ATSIG.

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Since the trough of the Great Recession both ATS and ATSIG have expanded at annual rates of approximately 3%.  Over the same period, inflation (as measured by the PCE price index) has averaged 1.6%.  Consequently, real spending has been growing at a pace of about 1.4%.

# # #

Arkansas Taxable Sales (ATS) is calculated by the Arkansas Economic Development Institute to serve as a timely proxy for Arkansas retail sales. The series is derived from sales and use tax data, adjusting for the relative timing of tax collections and underlying sales, changes in tax laws, and seasonal patterns in the data.  Arkansas Taxable Sales Including Gasoline (ATSIG) incorporates data on the state motor fuel tax and gasoline prices from the Oil Price Information Service. A spreadsheet of the monthly and quarterly data is available here: Arkansas Taxable Sales 2018:Q2 (Excel file).

Metro Area Employment and Unemployment – June 2018

By , August 1, 2018 1:32 PM

In the latest metropolitan area data from the Bureau of Labor Statistics (BLS), unemployment rates ticked lower from May to June in two of the metro areas that include parts of Arkansas, were slightly higher in four areas, and were unchanged in two.  Unemployment rates are little changed from a year ago, with the exception of Texarkana where the unemployment rate now stands at 0.8 percentage points higher than in June 2017.  In fact, the news release from the BLS notes that the increase in Texarkana was the largest in the nation.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS), Seasonally adjusted metropolitan area estimates

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS), and Seasonally Adjusted Metropolitan Area Estimates

As shown in the figure below, unemployment rates in both Texarkana and Memphis have been trending upward since the end of 2017, with Texarkana up by nearly a full percentage point over the first six months of 2018 (seasonally adjusted).  Meanwhile, rates in Northwest Arkansas are trending somewhat lower, with the unemployment rate in Fayetteville-Springdale-Rogers metro area declining from 2.9% in December 2017 to 2.6% in June.  The eight metro areas have evidently converged into three groups:  Texarkana and Pine Bluff have the highest rates — with unemployment rates in both areas now above 5%.  Memphis, Hot Springs and Fort Smith have settled-in at just over 4% while Little Rock, Jonesboro and Fayetteville have fallen into the neighborhood of 3%.

Source: Bureau of Labor Statistics, Seasonally Adjusted Metropolitan Area Estimates

Source: Bureau of Labor Statistics, Seasonally Adjusted Metropolitan Area Estimates

Payroll Employment
Figures on nonfarm payroll employment were mixed.  The three metro areas that have seen employment expand the most over the current expansion (Fayetteville, Jonesboro, and Little Rock) all experienced monthly declines in June.  Pine Bluff was also down for the month.  Compared to a year ago, all of Arkansas’ metro areas except Pine Bluff are showing unchanged or higher employment.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Over the longer run, employment growth trends among the state’s metro areas continue to diverge.   Jonesboro and Fayetteville still lead the pack with employment up nearly 20% and 24%, respectively, since the previous cyclical peak at the end of 2007.  Little Rock and Memphis are also in positive territory, albeit with significantly smaller cumulative gains.  The other four metro areas continue to show net employment declines from the pre-recession levels of a decade ago.  Pine Bluff, in particular, has suffered dramatic cumulative job losses, with employment falling by 12.4% since the beginning of the current expansion’s employment recovery (February 2010).

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Arkansas GDP – 2018:Q1

By , July 24, 2018 12:16 PM

State-level GDP data for the first quarter of 2018 showed zero growth in Arkansas, placing the state 49th among the 50 states (North Dakota experienced a decline of 0.6%).  The comparable value for U.S. GDP growth in Q1 was 1.8%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over the past four quarters Arkansas GDP expanded by 0.7%, well-below the U.S. average of 2.6%.  As shown in the figure below, Arkansas growth rate has lagged the nation since at least 2014.  From the beginning of 2014 through 2018:Q1, the growth rates of Arkansas and the U.S. have averaged 1.0% and 2.4%, respectively.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The breakdown of GDP growth by sectors shows that Arkansas’ weakness was largely attributable to the Agriculture, forestry, fishing, and hunting component, which subtracted nearly 0.7 percentage points from overall growth.  Other sectors dragging down Arkansas growth included Wholesale trade and Government.   Several sectors contributed positively to growth, including Manufacturing, Retail trade, Finance and Real estate, and Health Care.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The slow growth of Arkansas GDP in recent quarters is cause for some concern, but the initial quarterly estimates are subject to considerable revision.  Just six months ago the data were showing Arkansas outpacing the nation with a four-quarter growth rate of 3.6% (2016:Q3-2017:Q3).  The latest information show Arkansas growth rate to have been only 1.4% over that same period.

Later this week (July 27) the BEA will release statistics from the latest comprehensive update for national GDP, but the state-level revisions will not be available until the next quarterly release date on November 14.   Until then, this latest release represents the best information available, and it suggests that the Arkansas economy got off to a relatively slow start in 2018.

Arkansas Employment and Unemployment – June 2018

By , July 20, 2018 11:44 AM

Arkansas’ unemployment rate held steady at 3.8% in June as both the number of employed and the number of unemployed declined.  In contrast, the U.S. unemployment rate ticked up 0.2 percentage points to 4.0% as nationwide labor force participation increased.  This was the ninth consecutive monthly declines for household employment labor force participation in Arkansas.  The number of unemployed has now declined for the past two months.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm payroll employment increased by 1,500 in June and the preliminary May figure was revised upward by 1,100 (seasonally adjusted data*).  Employment in Professional & Business Services increased by 3,000 jobs — mostly in the Administrative & Support Services component (+2,300).  Other sectors gaining jobs included Construction, Financial Services, and Education & Health Services.   The not-seasonally adjusted data showed large declines in both Government and Educational Services, but these were primarily due to the start of summer break at public and private schools and universities.  Declining sectors included Leisure and Hospitality Services as well as all components of Trade, Transportation and Utilities.  Compared to a  year ago, employment is up overall in both the goods-producing and service-providing sectors.  Especially encouraging is the ongoing growth in Manufacturing and Construction.  In services, the growth sectors continue to be Professional & Business Services and Educational and Health Services.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Two Measures of Employment Growth
As the data for 2018 accumulate, it is becoming more evident that the two sources of employment data are providing conflicting signals.  As shown in the figure below, the trend growth rates for these two measures have generally been moving together up through the end of 2017.  Over the first six months of this year, however, data from the payroll survey has increased by 0.7% while the household survey data show a decline of 0.6%.  Of the two measures, the payroll survey is generally considered to be more accurate, although both are subject to revision as more information becomes available.  Based on the payroll data available to-date, it appears that employment growth is showing signs of recovery from a period of very slow growth near the end of 2017.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

# # #

 *Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, can be found here:  Table-Seasonally Adjusted NFPE.

Panorama Theme by Themocracy

AWSOM Powered